11 The Principle of Right Action
This chapter is ready for professional editorial review.
This chapter assumes you’re a moral person trying to do the right thing.
If you’re looking for something to justify doing the wrong thing, you’ll find one. Any approach can be gamed by someone determined to game it. I can’t help you there. Nobody can.
But if you’re the kind of leader who actually cares about getting it right, one who loses sleep over hard calls, who wonders whether you’re rationalizing or reasoning, then we have something to talk about. Because nobody else seems to be talking about it.
The leadership books give you “integrity” in the abstract. Be honest. Build trust. Do the right thing. They are the ethics version of the poster of the kitten hanging on a line with the caption ‘hang in there’. It’s cute, but not useful. What they don’t give you is what to do when the law is badly written, when the regulator’s interpretation is unclear, when your company’s risk appetite is higher than yours, when you have to decide whether this is the hill you die on or the one you walk past.
That’s the actual job. Not choosing between right and wrong. That’s easy. The job is choosing between gray and gray, between competing obligations, between your conscience and your paycheck and your team’s livelihoods and the company’s survival. The job is making those calls without perfect information, then living with the results of your choice.
This chapter is about navigating that gray. I am not talking about it because I’ve mastered it, I haven’t, I am not sure you can. I am talking about it because I’ve had to live it, and I’ve never seen anyone write about it. Those conversations happen over beers with a mentor, or worse over a conference room table.
11.1 Where the Gray Comes From
Executives operate in permanent gray. Law, regulation, company standards, and personal ethics overlap but rarely align cleanly.
Law is the clearest layer in principle. If a law exists and applies to you, you follow it. Full stop.
But law is human, flawed, and not sacred. Statutes contradict each other. Case law evolves. What’s legal in one jurisdiction is illegal in another. Laws get written by people who don’t understand the domains they’re regulating, amended by people who understand them even less, and interpreted by courts that may never have seen the inside of your industry.
None of that makes breaking the law acceptable. It just means “follow the law” is less straightforward than it sounds. You need to know what the law actually says, not what you assume it says. And you need to understand that legality is the floor, not the ceiling. Plenty of reprehensible behavior is perfectly legal.
Laws are not immutable. They can change, and sometimes they need to. If a law is bad, you still follow it, it’s still the floor, but you can work to change it. Advocacy within the legal framework is legitimate work. And sometimes it’s necessary. Laws get written by people who don’t understand the domains they regulate. Practitioners who stay silent leave that gap unfilled. Bringing expertise to the process is just good citizenship.
Regulation is where interpretation becomes everything. The text of a regulation matters less than how the regulator interprets it. The regulator’s interpretation is reality, regardless of what you think the words mean.
This requires investment. Investment in compliance officers, regulatory relationships, the tedious work of reading enforcement actions and guidance documents. Most companies underinvest and most executives operate on assumptions based on that underinvestment. When the regulator looks closely, “we weren’t sure” won’t save you. Regulators care about what you did. Many also care about whether you made a reasonable effort to understand your obligations. Not a token gesture, but genuine investment in knowing the rules. Whether that effort matters, and how much, depends on the regulator. And by regulator, I mean the person in the seat. The examiner, the enforcement officer, the one reading your file. Agencies have mandates, but people have judgment. You need to know who you’re dealing with.
Company standards define where your organization chooses to operate within the space that law and regulation allow.
Every company has a risk appetite, whether explicit or implicit. Some are conservative, they stay well inside the lines, even when pushing closer would be legal and profitable. Some are aggressive, they operate at the edge of what’s permissible, optimizing for the line rather than distance from it. Some are shady. Some are worse.
As a leader, you need to understand where your company actually stands, not where it claims to stand. The values on the wall are not always the values in practice. Watch what gets rewarded. Watch what gets punished. Watch what gets ignored.
Once you understand the company’s actual standards, you have a choice. Align with them, work to change them, or walk. If you’re senior enough, changing them might be real work you can do. That’s different from the self-deception of “fighting from the inside” with no actual power to move anything. If you have the capital and the will, spend it. But if you take that path, you owe yourself regular honesty: Is it working? Am I making real progress, or am I just comfortable? At some point you have to call it. If the answer is no, and there’s no realistic path forward, walk. What you cannot do is stay indefinitely misaligned while telling yourself change is coming. That corrodes your integrity faster than leaving ever could. The longer you stay misaligned, the more you become what you’re standing next to (Tenbrunsel and Messick, 2004). The strategic question is whether to stay. The tactical question, what to do when a specific conflict lands on your desk, is different.
Your personal line is the innermost layer. Your own moral compass, parallel to the others but not identical with them.
Ideally, your line is stricter than the company’s. You hold yourself to a higher standard than the minimum required. This gives you room to operate—the company’s standards don’t push against your conscience because your conscience is already further back.
If your line is looser than the company’s, you’re in constant tension. You think the company is being too cautious, too conservative, leaving money on the table. Maybe you’re right. But that tension will either pull you toward the company’s standard or push you out. It won’t stay stable.
Your personal line gets tested rarely but decisively. Most days you operate well inside it. Then one day something lands on your desk that sits exactly on the boundary. That’s the moment that defines you.
11.2 When the Layers Conflict
The layers are not a neat hierarchy. They conflict constantly.
The law might allow something that regulation prohibits. Regulation might permit something your company won’t tolerate. Company standards might demand something your conscience won’t accept. You can be simultaneously compliant with law, aligned with your company, and deeply uncomfortable with what you’re doing.
This is the gray. It never fully resolves.
When company standards push against your personal line, you have three options.
Advocate for change. Make the case that the company’s position is wrong. Spend political capital trying to move the standard. This works sometimes. It requires that someone above you is persuadable and that you have enough capital to spend.
Comply and document. Do what the company asks, document your objection, and accept that you’re operating below your preferred standard. This isn’t capitulation, it’s a discipline. The act of writing down your objection forces clarity on your own thinking. It creates accountability. It separates “I disagreed but participated” from “I went along without thinking.” And it leaves a record, because memory is unreliable and you may need to explain your reasoning later. But once you’ve made that choice, commit fully. No foot-dragging, no sabotage through half-effort. You documented your objection; now execute as if it were your own decision.
Refuse and accept the consequences. Decline to do what’s asked. This might mean the task goes to someone else. It might mean your career stalls. It might mean you get fired. Sometimes the consequences are smaller than you fear. Sometimes they’re exactly as bad as you fear. You don’t get to know in advance.
The fourth option is the one that destroys people: comply while pretending you didn’t, refuse while pretending you complied, or simply avoid the decision until it makes itself. These feel like escapes but they’re traps. The dissonance compounds until something breaks (Festinger, 1957).
11.3 The Narrative Test
I use a test that’s simple to state and hard to apply: Can I tell this story without shame?
Not to myself, I can convince myself of almost anything in the moment (Bandura, 1999). The question is whether I can tell the story to an audience that has every reason to be skeptical.
Can I explain this decision to a regulator who’s investigating?
Can I defend this choice to a judge who’s unimpressed by my justifications?
Can I describe this action to my employees without feeling like I’m spinning?
Can I tell this story to my family without leaving parts out?
If I’d feel evasive, if I’d need to frame it carefully, if there are details I’d rather not mention, that’s the signal. The story that requires spin isn’t passing the test.
This isn’t about purity. I’m not asking whether the decision was perfect or whether a saint would approve. I’m asking whether I can own it, stand behind the reasoning, acknowledge the tradeoffs, accept responsibility for the outcome.
The test has a time dimension too (Gilbert and Wilson, 2000). You can construct a narrative that sounds reasonable in the moment. How does it hold up in five years? Ten? When the context has faded and only the action remains, will you still be able to tell the story?
The future version of you is another skeptical audience.
11.4 The Cost of Taking a Stand
The leadership literature loves stories about principled stands. The executive who refused to cook the books. The manager who blew the whistle. The leader who walked away rather than compromise.
What the stories leave out is the cost.
Taking a stand on principle is not free. Sometimes it costs your job. Sometimes it costs your career in an industry. Sometimes it costs relationships with people you’ve worked with for years, people who see your stand as a betrayal or a judgment on them. Sometimes it costs your family’s financial security.
And sometimes, often, it costs nothing. The stand you were afraid to take turns out to be less dramatic than you imagined. You refuse, someone shrugs, the task goes elsewhere, life continues.
Other times, the stand is exactly as terrifying as you imagined.
At one company, we built a product whose whole value was integrity. We analyzed systems and found where they broke down; if something was wrong, we’d find it. I believed in that work. It’s why I took the job.
Early on, leadership wanted to land a major client, a big name that would have opened doors for us. The problem was that the client’s own operations were exactly what our product was built to detect. They didn’t want us to find anything. They wanted cover.
We probably could have made good money doing that. There’s a market for helping organizations look clean without actually being clean. But that’s not why I was there. I’d joined because I wanted to fight the problem, not help hide it. Taking this client would have turned us into the thing we were supposed to oppose.
The other C-suite executive and I saw it the same way, and we had to decide whether to say something. We knew we’d be going against people who outranked us. We knew we might lose. We decided that we couldn’t work for the leader running the company and pushing that customer, so we gave the board an ultimatum: the current leader or us.
We spent the afternoon after giving the board the ultimatum in a bar, wondering if we still had a job. There’s nothing heroic about that part. Just two executives who had made a bet they couldn’t take back, nursing drinks, not saying much. The wait was worse than the confrontation had been.
In the end, we won. That win came with a price. The board was angry with us. They never cared about the ethical question. What they cared about was that their chosen leader had been overruled. We’d forced their hand, and they didn’t forget it. Every conversation that followed was harder than it would have been. We’d preserved our integrity and damaged our standing. Both were true at the same time.
That’s what principled stands actually look like. You don’t get the clean version where you’re vindicated and everyone respects you for it. You get the messy version where you were right, and it still cost you something, and you’d probably do it again anyway.
You don’t get to know in advance which kind of stand you’re taking. The one that feels momentous might be nothing. The one that feels routine might be job-ending, or in the very extreme cases career-ending.
This uncertainty is not an excuse to avoid all stands. But it is reason to be deliberate. Not every discomfort requires a confrontation. Not every disagreement is a matter of principle. Choose carefully which hills matter enough to die on, because you don’t have infinite lives.
Political capital enters here. The capital you’ve banked determines the price of taking stands. An executive with deep reserves can refuse a questionable request and survive the friction. An executive with empty reserves takes the same stand and gets managed out within months. This isn’t fair, but it is reality. Whether you survive taking a stand shouldn’t depend on your political capital. But it does.
I’m not saying compromise on everything until you have capital. You do the right thing because it’s right. The principle doesn’t change. The price does.
The effect isn’t uniform. A stand might cost you capital with one person while building it with another, in the same room, at the same moment. One leader sees defiance; another sees integrity. Their factions follow. And someone who already hates you? You might have nothing to lose there anyway. The calculus depends on who you’re confronting, who’s watching, and who matters to your survival.
I learned this through a stand I didn’t take. On day two of a new job, I was in an org-wide meeting when the leader got angry at a product manager over some decision. He threw a chair across the room. Belittled that product manager in front of everyone. I sat there frozen, like a deer in the headlights. By the time I processed what had happened, it was over and the leader had left the room.
I wish I’d called that leader out there in the meeting. Looking back, I think I would have gained respect from everyone in that room, including the leader. People who act out like that often respect the person who doesn’t flinch. The observers would have seen someone with spine. Instead, I sat in shock, wondering if this really happened in professional settings.
That leader didn’t last long after that. The moment passed. But I’ve thought about it many times since, because it taught me something. That having the right principles isn’t enough. You also need the reflex to act on them in real time, even when shocked. That reflex comes from experience, from having faced enough situations that the next one doesn’t paralyze you.
The strategy for principled action is more complex than “always do the right thing.” You have to survive long enough for your principles to matter. But surviving doesn’t mean silence. It means choosing your stands deliberately and taking them well.
11.5 The Shadow Side
There’s a harder truth underneath all of this.
The difference between using influence to fix a bad system and using influence to escape a fair outcome isn’t legal. It’s moral. The first is legitimate. The second is corruption wearing a suit.
I saw this once, up close. An executive at one organization found a certain regulation inconvenient. Not unjust, not badly written, just in the way of something he wanted to do. I overheard the conversation. “That regulation is a problem. I’ll get it taken care of.” He made a call. The regulation went away. That’s stuck with me ever since. That’s what power looks like when it stops pretending to operate within the system.
You’ll see this. If you’re in leadership long enough, you’ll see someone use their position to get a different result than the system would have produced. You’ll wonder whether that’s leadership or abuse. Sometimes you won’t be able to tell. Sometimes you’ll be the one doing it, and you’ll have to decide which side of the line you’re on.
The damage extends beyond the person doing it. When a team watches their leader “fix” an outcome that was fair but inconvenient, they learn something about how the organization actually works. The rules are for people without power. The system is theater. The next time they’re in a position to game something, they remember what they saw.
The narrative test applies here too. If you can’t tell the story of how you used your influence without feeling like you’re justifying something, you probably are.
If your executives never push back on ethics, compliance, or risk, they aren’t protecting you, they’re exposing you.
A leader who always says yes isn’t leading. They’re either not seeing the problems, or they’re seeing them and hoping someone else will raise the flag. Either way, you’re operating without the early warning system you need.
Expect your CTO to have a line. You don’t have to agree with where they draw it. But you should know it exists, and you should know that they’ll tell you when something approaches it.
If they walk rather than cross it, that means they were doing their job. Paradoxically, the leaders who push back on principle make their agreement more valuable. When someone occasionally says no, their yes means something. You know it’s not reflexive compliance.
The leaders who worry you are the ones who never seem to find anything worth pushing back on.
11.6 Holding the Line
Your bottom line is your bottom line. Be true to it. But also architect your life so you can be true to it.
That bottom line can move and that’s ok. Someone offers a perspective you hadn’t considered. You study something more deeply. Experience changes your view. Adjusting your principles based on genuine learning is what informed adults do. The problem is when the situation forces the move, when you compromise not because you’ve changed your mind, but because you can’t afford to hold your position.
At this level, nobody’s going to starve. But there’s still pressure. Debts to service. People you support. A reputation you’ve spent decades building. An identity tied to your success. Being fired doesn’t just cost you income, it costs you standing. That pressure can force compromises you’d never make if the leverage weren’t there.
Whatever creates that pressure, neutralize it. Build financial runway so you can survive being fired. Diversify your reputation so it doesn’t depend on one role. Make it so the thing that would force you to compromise doesn’t have leverage on you. If it does, you’re not free to hold your line when it matters.
11.7 Living in the Gray
The gray doesn’t resolve. You don’t graduate to clarity. The layers keep conflicting, the situations keep arising, and you keep making calls without perfect information.
What changes is you.
Early in my career, I wanted clear rules. Tell me what’s right and I’ll do it. The discovery that the rules conflict, that reasonable people disagree, that some situations have no good options, that was destabilizing. It felt like the ground was shifting.
Now I understand that the shifting ground is the ground. There is no stable place to stand. There’s only the continuous practice of navigating, deciding, and living with the decisions.
The lens helps. The layers show you where the friction comes from. The narrative test gives you a gut check. But lenses are not absolution. You still have to make the call. You still have to own what follows.
The executives I respect most are not the ones who never face hard choices. They’re the ones who face them, make them, and remain able to tell the story. Not without regret, sometimes with plenty of regret. But without shame. Without evasion. Without the need to leave parts out.
That’s the standard. The ability to own what you did and why.
Right action isn’t a destination. It’s a practice. And the practice is harder than any leadership book prepared you for, because the leadership books are written for the easy cases. The hard cases, you navigate alone.
If this chapter helps, it’s not by resolving anything. The gray is real. The conflicts don’t resolve. The job is making decisions you can live with and then actually living with them.
The gray is where the real work happens. The easy calls don’t need you. Anyone can follow clear rules. The hard calls, the ones where the layers conflict and the right answer isn’t obvious, that’s where leadership actually means something. The practice doesn’t get easier, but you get better at it. And the ability to navigate the gray, to make hard calls and own them, is rarer and more valuable than you might think.
That’s something worth getting good at.